NATURAL GAS ENERGY

PROVEN RESERVES

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Increasing cost of natural gas energy resources lead many to wonder if we are reaching the end of the gas line. If we are running out, how much is left? And how long will the supply last?

Most of the concern is focused on proven natural gas energy reserves. Proven reserves are gas deposits that have already been located, tested, and reasonably accurate estimates of their size are known. These reserves are also readily accessible and economical to bring to market.

As with coal and oil estimates of future supplies, the future of natural gas energy supplies depends on a large number of factors and is subject to a great deal of debate. With those caveats once again in mind, let’s look again to U.S. Department of Energy figures.

Natural gas energy has it’s own units of measurement. If you own a gas furnace, you will see on your gas bill a price per CCF. A CCF of natural gas is one hundred cubic feet. The C in CCF comes from the Roman Numeral C, which equals 100.

If you have a large gas bill the price might be shown in MCF. An MCF is one thousand cubic feet of natural gas, the M also comes from Roman Numerals and equals 1,000.

But one thousand cubic feet of gas is a microscopic amount when crunching global, or even regional consumption numbers. For those large amounts gas is measured in Trillions of Cubic Feet or, simply, TCF. So, one TCF equals one billion MCF (1,000,000,000 MCF). If you see a number like 100 TCF, it means one hundred Trillion Cubic Feet of natural gas.

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Known, proven, marketable natural gas energy reserves amount to:

U.S. reserves: 192.5 TCF

North American reserves: 265 TCF

Total Global Reserves: 6,112.1 TCF

(D.O.E. Source: D.O.E. International Natural Gas Reserves )

Of course these numbers do not include future findings or changes in future demand.

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Currently, natural gas consumption numbers look like this:

U.S. annual consumption: 23 TCF

North American annual consumption: 28 TCF

Global annual consumption: 99 TCF

(D.O.E. Source: D.O.E. International Natural Gas Consumption )

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What does that mean in terms of longevity of our natural gas supply? Let’s assume that natural gas use will continue increasing at a fairly steady growth rate of about 2.3% per year as indicated in the D.O.E. report. If we also assume that no future marketable gas wells are discovered (both of which are tall assumptions) and crunch the D.O.E. numbers, we come up with what at first looks like a rough estimate of a 39-year supply, using the above assumptions. Of course, the problem with assumptions is that they often prove to be incorrect.

The same problems found in estimating oil and coal resource limits also apply to natural gas estimates. Natural gas consumption increases of 2.3% per year probably won’t hold up over the long term. That 2.3% average can increase dramatically if conversion of natural gas to liquid fuel increases. That average can also decrease for a number of reasons including increased use of competitive energy forms.

Another huge factor that can change forecasts is exploration. In 1980 proven world natural gas reserves stood at about 2,500 TCF. Since 1980, global gas consumption has averaged about 75 TCF per year and used almost 2,000 TCF of gas. Rather than being almost out of gas, we currently have global, proven natural gas reserves of over 6,000 TCF.

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In fact, proven natural gas reserves have increased in most years since 1980 as can be seen in this D.O.E. graph.

(D.O.E. Source: D.O.E. World Gas Reserve Forcast 2005.) _________________________________________________________________

If Peak Resource advocates are correct, we should expect natural gas resources to peak in about 2015 and be used up in about 2075.

If it turns out that we are running out of proven conventional natural gas energy reserves, we do still have time to find and develop alternatives. And the alternatives are much closer than many would believe possible.

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